MEMORANDUM OPINION AND ORDER
DAVID A. BAKER, Magistrate Judge.
Plaintiffs, Long Excavating & Recycling, LLC, Brock Cody, and Charles Stewart Long, Jr., sue Defendants, Bates Hewett & Floyd Insurance Agency, Dee Dee Germany, and Westfield Bank, FSB, for breach of contract, fraud, negligence, wantonness and/or recklessness. (Doc. 52). Before the court is Defendant Westfield Bank, FSB's Motion to Dismiss the Second Amended Complaint. (Doc. 54). Plaintiffs assert a single claim for breach of contract against Westfield Bank, FSB. (Doc. 52 at 7-10). The matter has been fully briefed by the parties, and the court heard argument on September 24, 2018. For the reasons that follow, the court grants in part and denies in part Westfield Bank, FSB's motion.
I. Jurisdiction
This matter was removed to this court on the basis of diversity of citizenship pursuant to 28 U.S.C. § 1332(a). The parties do not contest personal jurisdiction. Defendants sought to change venue to the Southern Division of the Middle District, but that motion was denied without prejudice. (Docs. 3, 11).
II. Background and Statement of Facts
On June 21, 2017, Plaintiffs initiated this action by the filing of a three-count complaint in Bullock County, Alabama Circuit Court against Defendants, Bates Hewett & Floyd Insurance Agency1 and its agent employee, Dee Dee Germany. (Doc. 1-9). On July 28, 2017, Defendants removed the case to this court pursuant to 28 U.S.C. §§ 1332, 1441, and 1446, on the basis of diversity of citizenship and an amount in controversy exceeding $75,000. (Doc. 1).
Defendants moved to transfer the case to the Southern Division of the Middle District of Alabama because none of the parties reside in the Northern Division. (Doc. 3). Although Defendants acknowledge in the motion to transfer that the subject fire loss occurred in Bullock County, which is in the Northern Division, they nevertheless argue that the witnesses, documents, and conversations are located or occurred elsewhere. The court denied the motion without prejudice. (Doc. 11).
After Defendants answered the complaint (Doc. 27), the parties jointly moved to amend their pleadings to add Westfield Bank, FSB as a party defendant, which the court granted. (Docs. 28, 29). Thereafter, Plaintiffs filed a second amended complaint on June 19, 2018. (Doc. 52). Plaintiffs allege that Brock Cody and Charles Stewart Long, Jr., are the owners and sole members of Long Recycling Excavating, LLC ("Long Excavating"), which is a logging business. (Doc. 52, ¶¶ 7, 8). Long Excavating contracted to perform logging work in Bullock County, Alabama. Id. ¶ 8. As part of the terms of the logging contract, Long Excavating was required to procure and maintain insurance coverage for its equipment and logging activities in the cutting of a timber tract in Bullock County. Id. ¶ 9. Plaintiffs, Brock Cody and Charles Long, Jr., obtained insurance coverage on behalf of Long Excavating through Bates Hewett & Floyd Insurance Agency ("Bates"), an insurance agency located in Palatka, Florida, and its agent, Defendant Dee Germany. Id. ¶¶ 10, 11. Bates brokered insurance coverage for Plaintiffs with Arch Insurance Company and/or Arch Insurance Group ("Arch") based in Kansas City, Missouri. Id. ¶ 12. Bates also obtained financing for Plaintiffs under a Premium Finance Agreement with Defendant Westfield Bank, FSB ("Westfield") that paid Plaintiff's entire annual insurance premium to Arch. Id. ¶ 14. In turn, Plaintiffs were to make monthly premium payments to Westfield. Id. Once insurance coverage was obtained for Long Excavating in March 2016, Plaintiffs began making the periodic insurance premium payment and engaged in logging work in Bullock County, Alabama. Id. ¶ 15.
The insurance policy covered multiple pieces of equipment owned by Long Excavating including a 1988 John Deere Skidder Model 648D and a 2007 Hydro-Ax 2470. Id. ¶ 16. In May of 2016, Plaintiffs made an insurance claim for the 1988 John Deere Skidder that was destroyed in a fire loss, and Arch paid the claim as a covered loss. Id. ¶ 17. In April 2016, Plaintiffs added a 2013 John Deere skidder Model 748H, which increased the total monthly premium from $526.74 to $952.25. Id. ¶ 18.
Sometime prior to July 8, 2016, Plaintiff Long Excavating failed to timely pay a monthly insurance premium payment. Id. ¶ 19. On July 8, Westfield mailed Long Excavating a Notice of Intent to Cancel Insurance due to the unpaid premium. Id. ¶ 20. Thereafter, Long Excavating made the premium payment, and Long Excavating's insurance coverage with Arch was reinstated. Id. In July 2016, Plaintiffs decided to sell the 2013 John Deere skidder and the portion of the lump sum premium payment for the John Deere skidder was returned to Westfield. Id. ¶ 21.
Again on September 8, 2016, Plaintiff Long Excavating failed to make a timely monthly insurance premium payment, and Westfield sent a Notice of Intent to Cancel Insurance. Id. ¶ 22. The Notice of Intent to Cancel Insurance notified Long Excavating that if the outstanding premium payment was not received by September 23, 2016, Long Excavating's coverage would be canceled effective September 23, 2016. Id. Two days prior, on September 21, 2016, Westfield received $1,572.37 payment in returned premium from Arch as a result of Plaintiffs' sale of the 2013 John Deere skidder. Id. ¶ 23. On September 23, 2016, Westfield issued a Notice of Cancellation that canceled insurance coverage for Long Excavating, effective 12:01 AM on September 23, 2016. Id. ¶ 24.
On Friday, September 30, 2016, Brock Cody called Bates and spoke with his insurance representative Germany, who instructed Brock Cody to immediately make payment to Westfield Bank in the amount of $1,763.72. Id. ¶¶ 25, 26. She represented that the payment would satisfy all outstanding insurance premiums for Long Excavating and would pay all future remaining premiums for Long Excavating to maintain coverage with Arch Insurance through April 2017. Id. ¶ 27. Specifically, Germany represented to Brock Cody that payment of $1,763.72 would allow his insurance coverage with Arch Insurance to be reinstated, as it had been in the past, and that the equipment with Long Excavating would be covered. Id. ¶ 28. Brock Cody made the payment on Friday, September 30, 2016, and the payment posted on Monday, October 3, 2016. Id. ¶ 30.
On October 3 and 7, 2016, Brock Cody spoke with Germany who assured him that the coverage will be reinstated. ¶¶ 31-35. Long Excavating continued logging operations based on Germany's representations. ¶ 36. On October 14, 2016, unbeknownst to the Plaintiffs, Germany learned that Long Excavating's insurance coverage would not be reinstated and that Long Excavating had no insurance coverage. ¶ 37. Germany failed to communicate to Brock Cody or Charles Stewart Long, Jr., that the insurance coverage for Long Excavating was not reinstated, and that as a result, Long Excavating had no insurance coverage for its equipment. ¶ 38. Germany and Bates failed to procure replacement coverage for Long Excavating. ¶ 40.
On October 20, 2016, while engaged in logging operations, Long Excavating's 2007 Hydro-Ax Model 2470 was totally destroyed by fire. Id. ¶ 41. Brock Cody immediately made a claim to Bates for the fire loss. Id. ¶ 42. Thereafter, Germany communicated to Charles Long, Jr., and Brock Cody that Long Excavating's insurance coverage was not reinstated, that no replacement coverage had been procured for the Plaintiffs, and that there was no coverage for the October 20, 2016 loss. Id. ¶ 43.
III. Legal Standard
Federal Rule of Civil Procedure 8 provides that a complaint must contain "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2). The pleader must allege "enough facts to state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). "[D]etailed factual allegations" are not required, but mere "labels and conclusions" or "a formulaic recitation of the elements of a cause of action" are not enough. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). On a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), a court "accept[s] the allegations in the complaint as true and constru[es] them in the light most favorable to the plaintiff." Hill v. White, 321 F.3d 1334, 1335 (11th Cir. 2003).
IV. Analysis
Westfield moves to dismiss Plaintiffs' breach of contract claim arguing Brock Cody and Charles Long, Jr. lack standing to sue under the Premium Finance Agreement as they are not parties to the Agreement. (Doc. 55 at 13). Westfield additionally argues that given Long Excavating twice defaulted on the Premium Finance Agreement, Westfield was entitled under the Agreement to apply the September 2016 refund to Long Excavating's remaining secured debt and was not obligated to apply the refund to the overdue August 2016 payment. Id. at 5-13.
Plaintiffs cite to the following representations and warranties contained in the Premium Finance Agreement to support their position that Westfield's motion should be denied.
To hold in trust for LENDER any payments made or credited to the Borrower through or to the undersigned, directly, indirectly, actually or constructively by any of the insurance companies and to pay the monies to LENDER upon demand to satisfy the then outstanding indebtedness of the Borrower and that any lien the undersigned now has or hereafter may acquire on any returned premium arising out of the above listed insurance policies is subordinated to LENDER's lien or security interest therein . . .
(Doc. 57 at 4). At issue is the meaning of "satisfy the then outstanding indebtedness of the Borrower." Plaintiffs contend the returned premium payment should have been applied to the "then outstanding indebtedness" which, as of September 21, 2016, was the August premium payment. (Doc. 57 at 2-3).
In appropriate cases, contract provisions can be construed and applied to alleged facts as a matter of law, allowing disposition of such cases at the motion to dismiss stage. Here, however, ambiguities in the language of the Agreement, the parties' course of conduct and application of the universal obligation of good faith dealing do not support making a ruling on the viability of Plaintiffs' claims against Westfield prior to development of a full record. See Novoneuron Inc. v. Addiction Research Inst., Inc., 326 F. App'x 505, 509 (11th Cir. 2009) (quoting Frulla v. CRA Holdings, Inc., 543 F.3d 1247, 1252 (11th Cir. 2008)) (dismissal of complaint found improper where Agreement was "susceptible to two different interpretations, each one of which is reasonably inferred from the terms of the contract"). Accordingly, the Court declines, at this time, to make a definitive ruling as to the proper application of the terms of the Premium Finance Agreement in reference to the bank's rights and obligations as to funds received in the circumstances evident here.
With respect to the individual Plaintiffs, issues were raised in the course of argument as to their status as guarantors of the corporate obligations and potential third party beneficiaries of the Premium Finance Agreement. Those issues, while potentially valid, are not adequately alleged in the Second Amended Complaint. As to their claims, therefore, they will be allowed a final opportunity to amend their complaint to include whatever facts they can muster as to their relationship to the LLC, the financing, and any personal guarantees or other liability they may face related to the claims in this case.
V. Conclusion and Order
For the reasons stated, it is hereby ORDERED:
Westfield Bank, FSB's Motion to Dismiss Second Amended Complaint (Doc. 54) is granted in part as it relates to the claims of the individual Plaintiffs, Brock Cody and Charles Stewart Long, Jr. Plaintiffs may file a Third Amended Complaint within 14 days to allege additional facts related to the standing and claims of the individual Plaintiffs as discussed above. (Or Plaintiffs may indicate there will be no further amendment). Defendants shall file responses within 14 days of the amendment.
In all other respects, Westfield Bank, FSB's Motion to Dismiss Second Amended Complaint (Doc. 54) is denied.
DONE and ORDERED.
A copy of this checklist is available at the website for the USCA, 11th Circuit at www.ca11.uscourts.gov Effective on December 1, 2013, the fee to file an appeal is $505.00
CIVIL APPEALS JURISDICTION CHECKLIST
1. Appealable Orders: Courts of Appeals have jurisdiction conferred and strictly limited by statute:
(a) Appeals from final orders pursuant to 28 U.S.C. § 1291: Final orders and judgments of district courts, or final orders of bankruptcy courts which have been appealed to and fully resolved by a district court under 28 U.S.C. § 158, generally are appealable. A final decision is one that "ends the litigation on the merits and leaves nothing for the court to do but execute the judgment." Pitney Bowes, Inc. v. Mestre, 701 F.2d 1365, 1368 (11th Cir. 1983) (citing Catlin v. United States, 324 U.S. 229, 233, 65 S.Ct. 631, 633, 89 S.Ct. 911 (1945)). A magistrate judge's report and recommendation is not final and appealable until judgment thereon is entered by a district court judge. 28 U.S.C. § 636(b); Perez-Priego v. Alachua County Clerk of Court, 148 F.3d 1272 (11th Cir. 1998). However, under 28 U.S.C. § 636(c)(3), the Courts of Appeals have jurisdiction over an appeal from a final judgment entered by a magistrate judge, but only if the parties consented to the magistrate's jurisdiction. McNab v. J & J Marine, Inc., 240 F.3d 1326, 1327-28 (11th Cir. 2001).
(b) In cases involving multiple parties or multiple claims, a judgment as to fewer than all parties or all claims is not a final, appealable decision unless the district court has certified the judgment for immediate review under Fed.R.Civ.P. 54(b). Williams v. Bishop, 732 F.2d 885, 885-86 (11th Cir. 1984). A judgment which resolves all issues except matters, such as attorneys' fees and costs, that are collateral to the merits, is immediately appealable. Budinich v. Becton Dickinson & Co., 486 U.S. 196, 201, 108 S.Ct. 1717, 1721-22, 100 L.Ed.2d 178 (1988); LaChance v. Duffy's Draft House, Inc., 146 F.3d 832, 837 (11th Cir. 1998).
(c) Appeals pursuant to 28 U.S.C. § 1292(a): Under this section, appeals are permitted from the following types of orders:
i. Orders granting, continuing, modifying, refusing or dissolving injunctions, or refusing to dissolve or modify injunctions; However, interlocutory appeals from orders denying temporary restraining orders are not permitted. McDougald v. Jenson, 786 F.2d 1465, 1472-73 (11th Cir. 1986);
ii. Orders appointing receivers or refusing to wind up receiverships; and
iii. Orders determining the rights and liabilities of parties in admiralty cases.
(d) Appeals pursuant to 28 U.S.C. § 1292(b) and Fed.R.App.P. 5: The certification specified in 28 U.S.C. § 1292(b) must be obtained before a petition for permission to appeal is filed in the Court of Appeals. The district court's denial of a motion for certification is not itself appealable.
(e) Appeals pursuant to judicially created exceptions to the finality rule: Limited exceptions are discussed in cases including, but not limited to: Cohen v. Beneficial Indus. Loan Corp., 337 U.S. 541, 546, 69 S.Ct. 1221, 1225-26, 93 S.Ct. 1528 (1949); Atlantic Fed. Sav. & Loan Ass'n v. Blythe Eastman Paine Webber, Inc., 890 F.2d 371, 376 (11th Cir. 1989); Gillespie v. United States Steel Corp., 379 U.S. 148, 157, 85 S.Ct. 308, 312, 13 L.Ed.2d 199 (1964).
2. Time for Filing: The timely filing of a notice of appeal is mandatory and jurisdictional. Rinaldo v. Corbett, 256 F.3d 1276, 1278 (11th Cir. 2001). In civil cases, Fed.R.App.P. 4(a) and (c) set the following time limits:
(a) Fed.R.App.P. 4(a)(1): A notice of appeal in compliance with the requirements set forth in Fed.R.App.P. 3 must be filed in the district court within 30 days after the order or judgment appealed from is entered. However, if the United States or an officer or agency thereof is a party, the notice of appeal must be filed in the district court within 60 days after such entry. THE NOTICE MUST BE RECEIVED AND FILED IN THE DISTRICT COURT NO LATER THAN THE LAST DAY OF THE APPEAL PERIOD — no additional days are provided for mailing. Special filing provisions for inmates are discussed below.
(b) Fed.R.App.P. 4(a)(3): "If one party timely files a notice of appeal, any other party may file a notice of appeal within 14 days after the date when the first notice was filed, or within the time otherwise prescribed by this Rule 4(a), whichever period ends later."
(c) Fed.R.App.P. 4(a)(4): If any party makes a timely motion in the district court under the Federal Rules of Civil Procedure of a type specified in this rule, the time for appeal for all parties runs from the date of entry of the order disposing of the last such timely filed motion.
(d) Fed.R.App.P. 4(a)(5) and 4(a)(6): Under certain limited circumstances, the district court may extend or reopen the time to file a notice of appeal. Under Rule 4(a)(5), the time may be extended if a motion for an extension is filed within 30 days after expiration of the time otherwise provided to file a notice of appeal, upon a showing of excusable neglect or good cause. Under Rule 4(a)(6), the time to file an appeal may be reopened if the district court finds, upon motion, that the following conditions are satisfied: the moving party did not receive notice of the entry of the judgment or order within 21 days after entry; the motion is filed within 180 days after the judgment or order is entered or within 14 days after the moving party receives notice, whichever is earlier; and no party would be prejudiced by the reopening.
(e) Fed.R.App.P. 4(c): If an inmate confined to an institution files a notice of appeal in either a civil case or a criminal case, the notice of appeal is timely if it is deposited in the institution's internal mail system on or before the last day for filing. Timely filing may be shown by a declaration in compliance with 28 U.S.C. § 1746 or a notarized statement, either of which must set forth the date of deposit and state that first-class postage has been prepaid.
3. Format of the notice of appeal: Form 1, Appendix of Forms to the Federal Rules of Appellate Procedure, is a suitable format. See also Fed.R.App.P. 3(c). A pro se notice of appeal must be signed by the appellant.
4. Effect of a notice of appeal: A district court lacks jurisdiction, i.e., authority, to act after the filing of a timely notice of appeal, except for actions in aid of appellate jurisdiction or to rule on a timely motion of the type specified in Fed.R.App.P. 4(a)(4).
